Pebble Beach revenue slips, profits improve in first half

The AIM-traded firm said that, although overall revenue for the period slightly decreased to £5.3m from £5.5m year-on-year, it saw significant growth in its higher-margin service level agreement (SLA) revenue, which rose by 21% to £3.1m.

It said the shift towards recurring revenue, which now accounted for 58% of total revenue, helped maintain an adjusted EBITDA of £1.4m, consistent with the first half of 2023, but with an improved margin of 27%.

Profit before tax increased to £0.3m, compared to £0.2m in the same period last year, and adjusted earnings per share rose to 0.3p from 0.2p.

Operational highlights included the launch of the new IP-native PRIMA platform at the NAB trade show in Las Vegas, and the strategic strengthening of the sales team, including the appointment of Sally Wallington as senior vice-president of sales.

The company also continued to adjust SLA pricing, leading to an increase in multi-year renewal orders.

Looking ahead, Pebble Beach reported a strong weighted pipeline valued at £9.8m - a 13% increase from last year.

The company said it expected to meet 2024 market expectations and was positioned to quickly deliver project orders in the second half, due to reduced hardware lead times and enhanced operational readiness.

It added that the increase in multi-year SLAs also provided better visibility for future revenue.

“The group continues to demonstrate resilience with increased order intake in spite of ongoing challenging external market conditions causing customers to continue delaying decisions on upgrades,” said non-executive chairman John Varney.

“The group entered the second half with a strong sales pipeline alongside improved visibility - and value - of recurring revenues.

“The board is expecting to deliver against market expectations for the year with the expectation that there will be increased project orders placed in the second half based on historical trends and a strong order book.”

Varney said that, given the continued momentum being seen by the group, the board was focussed on driving further organic growth complemented by inorganic growth, when appropriate, as opportunities to enhance technology were identified.

“We continue to progress with investment in the development of our new solutions to help support the industry in its transition to IP, and I am confident PRIMA will be the best product to support the inevitable full-scale adoption.”

At 1241 BST, shares in Pebble Beach Systems Group were up 4.57% at 12.02p.

Reporting by Josh White for Sharecast.com.